PlanB criticises Ethereum for its centralised structure and PoS model, labelling it a “shitcoin”. He highlights concerns over its pre-mined supply and the implications of PoS on control. Despite the critique, Ethereum’s role in real-world applications is flourishing, processing substantial stablecoin transactions and evolving towards enhanced performance and scalability.
PlanB, a prominent Bitcoin analyst known for the Stock-to-Flow (S2F) model, has publicly scrutinised Ethereum due to significant drops in its price and market dominance. He questions Ethereum’s mechanisms, particularly its shift from Proof of Work (PoW) to Proof of Stake (PoS), labelling it as centralised and pre-mined in nature, despite its position as the second-largest cryptocurrency by market capitalisation.
In particular, PlanB referred to a 2022 commentary by Vitalik Buterin, Ethereum’s co-founder, where Buterin dismissed the Stock-to-Flow model for its perceived misleading nature regarding Bitcoin’s pricing. In defence of his position, PlanB ridiculed Ethereum, remarking on the ETH/BTC trading pair reaching a nine-year low and describing ETH as a “shitcoin”. He condemned its centralised structure, pre-mined supply, and flexible supply schedule under PoS as detrimental to the cryptocurrency landscape.
PlanB is not alone in his assessment of Ethereum’s trajectory. Meltem Demirors, an executive at Crucible Capital, is quoted expressing that the transition to PoS was a significant error that might stifle innovation and dilute Ethereum’s core functionality. Her concerns spotlight the implications of reduced energy consumption post-transition versus the long-term valuation of the network.
Further emphasising PlanB’s critique is the discussion surrounding Ethereum’s pre-mining practices, where over 72 million ETH—approximately 60% of the circulating supply—was pre-mined by developers. This pre-mining potentially grants disproportionate control to a limited number of stakeholders, particularly in a PoS framework, where larger holders can exert substantial influence over transaction validation.
Despite prevalent criticisms, Ethereum continues to demonstrate its growing significance in practical applications. Analyst Danny Marques noted that Ethereum has processed substantial stablecoin transactions, exceeding $14 trillion in 2024, surpassing Visa. Furthermore, Ethereum’s native stablecoin supply constitutes over 50% of the entire stablecoin market.
Investor perspectives further weigh in, indicating that Ethereum captures 56% of all real-world asset values. Some advocates argue Ethereum is decentralising over time, contrasting with Bitcoin’s increasing centralisation due to institutional accumulation of BTC. This infers broader questions about the decentralised nature of networks influenced by significant holders, possibly steering them toward centralised control.
In positive developments, Ethereum’s infrastructure may experience the potential upgrade proposed by co-founder Vitalik Buterin, intending to replace the Ethereum Virtual Machine (EVM) with RISC-V. This transition promises enhancements in smart contract performance and scalability while ensuring compatibility with existing contracts.
